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 Replies: 11 / Views: 1,812 |
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Valued Member
 United States
326 Posts |
Hi all, This is an odd question perhaps, but of interest to me at least. I have been a life long but always small time collector. I'm now semi-retired but still working part time to supplement social security. It would be great to do what I love to do and make an extra $1000 a month buying, selling, trading coins. I'd love to hear some opinions about what the business model would have to look like or, is it even possible on a fairly limited budget. Could a person carefully buy, say $10,000 worth of coins from a dealer, assuming knowing what I was doing and getting a "bulk discount" and then sell at a reasonable mark up? Something similar to the spread in the CDN? I have about 2000 coins currently but most are BU raw cents and nickels from the 60's that I picked from OBW rolls, plus a lot of high grade modern proofs of all face values, mostly from the 60's. I also have maybe 20 slabbed Morgans. So that would be my starting inventory. Not much so that's why I ask about how to buy more coins to have available to auction on ebay, Heritage, Great Collections and the like. It's a fun thought at least. |
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Rest in Peace
United States
18456 Posts |
Are you talking about an online dealer or brick and mortar coin shop . IMHO a small time dealer will be better off working online including E-bay . There is much to much overhead with a shop . And if you don't have enough inventory you'll go down and out within a year or two at the most .  |
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Pillar of the Community
United States
4846 Posts |
I've started flipping a little more than a year ago with good success. I'm now in the position where my girlfriend got job elsewhere and when we move I'll be doing this fulltime. My favorite part of it is being able to have some pretty awesome coins pass through my hands that I absolutely never would have been able to own otherwise.
One thing I can say is that there is a ton of sweat capital involved in sourcing. I don't think it will be as simple as walking into your LCS with 10K and walking out with 12K worth of inventory. There are, however, situations where your LCS will let you buy stuff they want to get rid of at or close to wholesale pricing, I managed to pick up 150ish silver proof sets for around 18x face value and flipped them all for 20x for example.
I would also recommend is setting up a sole proprietorship/LLC if you don't live in a state where coins are tax exempt. Even if you do, it may be beneficial if you get big enough.
Edited by Adam_E
06/27/2022 01:51 am
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Pillar of the Community
United States
3848 Posts |
I am a small time dealer myself, hardly now because my living situation has been switched up. I work on Craigslist and ebay, buying and selling on both. I bought collections that I sourced, and I had people contact me through my "coins wanted" ad. Right before covid, and during the start for about six months, I had about one collection purchased per week. Maybe it was a jar of wheat cents, maybe it was a large collection of silver coins. Many great memories made from Craigslist weirdos. All said, I only made a couple hundred dollars a month. In 2021, I made just below $2,000 cash the entire year, although I kept at least a few thousand dollars in coins. The first half of the year I was going to about 30-60 garage sales a week. The second half of the year I focused on selling type coins. Not much money, but I was a high school student and only had $1,000 capital. The money recycled to buy more coins, for the main goal of growing the collection. Many coins I kept from the collections too, including a $10 and $5 gold piece for "free". You are probably wanting to go larger scale, and that would cost more money and time. I honestly don't understand how people are making 15% or less on sales, that doesn't seem worth it to me. I aim for a minimum of 30% profit, so deals are harder to come by. If you go by a smaller margin, then you have more opportunity. Suffering from bust half fever. Want to learn how to attribute early half dollars by die variety? Click Here: http://goccf.com/t/434955Shoot me a PM if you are looking to sell bust halves. |
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Valued Member
 United States
326 Posts |
@T-BOP Online is my intention. I don't have the financial resources to do a brick and mortar shop. Plus I wouldn't want to be tied down to a store's open hours, unless by appt. only and then it makes even less sense to pay a lease.
@ Adam E and jacrispies: Thanks for sharing those scenarios. I get how the margins need to be higher. If you're paying 5% to 10% sellers fees online plus shipping supplies and postage, 15% ain't gonna cut it.
I have a friend who used to work for Heritage. He doesn't any more but I see their weekly wholesale list.Prices aren't always all that low but it does seem that one way to go would be to deal in the $2000 to $4000 per coin range and at least cut down on the handling costs of shipping 30 coins per week.
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Moderator
Australia
16805 Posts |
You might get away with going into a coin shop and buying up some cheap inventory, once. Probably not twice. Coin dealers are generally having a hard time trying to make a profit, they're not charities and generally aren't seeking to create more competition for themselves. If dealers are giving you a nice discount right now, that's probably because they know you're a collector and aren't going to turn around and flip the coins you just bought cheaply. Where a small aprt-time dealer might find a niche market is places like: - Small coin shows, and car boot sales and similar marketplaces. - ebay. Has the advantage of being as smell-scale or as large-scale as you feel like making it. - Specialize. Is there an area where your coin collecting was focussed, to the extent that you can cherry-pick unspotted bargains in less-experienced dealer's trays? Don't say "infinitely" when you mean "very"; otherwise, you'll have no word left when you want to talk about something really infinite. - C. S. Lewis
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Pillar of the Community
United States
4846 Posts |
Also, I wouldnt sleep on is pawn shops. 90% of the time they're overpriced, but every once in a while youll come across a shop that has deals. If you can build a relationship you can consistently have good inventory flowing in. I have a shop that I used to go to that I snagged pre-33 for melt, eagles for like $27ea, and a couple other great deals.
When it comes to margins it goes without saying that bullion will have super thin margins. However it is much easier to move. I will pick up all the junk I can find at 18x and flip it for 19.5x on places like reddit. Numismatic stuff I shoot for closer to 20%, specialty stuff like errors can go from 40-200% or more depending on what it is.
Take advantage of credit card points. I have a bog standard 2% cash back card that I spent 80K on last quarter, that's worth $1600 in cashback alone. Just dont carry a balance and dont overspend your limit, obviously.
Edited by Adam_E
06/27/2022 01:51 am
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Pillar of the Community
United States
3848 Posts |
One thing that can be focused on is building a network of collectors that are willing to buy. I had a guy that would buy all proof sets, another guy that would buy all silver, etc. The faster you can move inventory, the better, and ready collectors are the best deal you can get. You definitely don't want your money tied up in items that are too hard to sell.
Suffering from bust half fever. Want to learn how to attribute early half dollars by die variety? Click Here: http://goccf.com/t/434955Shoot me a PM if you are looking to sell bust halves. |
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Valued Member
United States
326 Posts |
Thanks again, Sap, Adam E, and Jacrispies. All very good info to consider.
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Pillar of the Community
United States
733 Posts |
My local guns shows have a couple coin and ammo dealers
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Valued Member
United States
326 Posts |
As Sap mentioned in the earlier post, specializing seems like a good idea. Since I have a natural interest in Morgan VAM's , that might be a niche to focus on. Do you know if VAM's bring much of a premium in sale price? Maybe if they are in the top 100? |
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Valued Member
United States
326 Posts |
@ Boba Debt : Very interesting. Thanks!
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Replies: 11 / Views: 1,812 |
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Posted 06/26/2022 1:16 pm
